Is online streaming helping or hurting Chicago musicians?
Chicago based musicians, Brett, Jack, Alex play a late night show promoting their band Long Live the Goat.
After their midnight set at Liar’s Club located at 1665 W. Fullerton Avenue, brothers Alex and Brett Fishback set up a booth to sell merchandise for their band, Long Live the Goat.
Taking a page from musicians across the country, these Chicago brothers must rely on t-shirt sales and other small items to make money rather than selling albums.
“It’s kind of nuts. These days we really don’t bank on [album sales] at all. If we go to a show and really plan on making profit, we’re pushing our merchandise and getting people in the door. As far as getting people to buy our CD, that’s great but they’re going to stream it on Spotify or Pandora,” Brett Fishback said.
Pandora Media, based in Oakland, California, is internet-based radio which plays music that listeners have chosen and, based on their selections, chooses other artists the listener may like. With little more than 2,000 employees, the company is currently valued at $2.6 billion.
Although the music streaming service is a billion-dollar company, analyst from Albert Fried & Company said, “Pandora shares are unattractive.”
The financial analyst group noted that Pandora has been “under performing in a weak economy,” with its shares hitting a 52-week high of $16 a share but now currently trading at $11 per share.
The sudden spiral that is facing Pandora could possibly have a positive impact on brick-and-mortar shops that rely heavily on record sales.
Dan McCune, store manager at Permanent Records, 1914 W. Chicago Avenue, said, “Online streaming hasn’t dictated the direction of the business, it’s more of a companion.”
McCune, who has been managing the Ukrainian Village shop for over five years, said although online streaming may have killed other compact forms like CD’s, “a record store will always be a record store.”
Since September, Pandora saw its revenue increase 20 percent to $992 million. The company also saw subscriptions increase one percent to $166 million and advertising increase 14 percent to $759 million.
But despite the uptick in numbers, analysts still see the music giant stumbling. A Terefis analysis said, “Advertisement revenues aren’t growing fast enough to outrun the rise in content cost.”
Pandora may be seeing rough times but its acquisition of Ticketfly for $450 million back in October of 2015 had analysts giving credit to the company for an attempt to diversify its portfolio with new revenue streams.
Ticketfly is an online service that allows users to purchase event tickets through Pandora.
Still, Pandora is one of three main music-streaming services that seem to have a tight grip on the music industry. Heavy weights like Spotify and Apple Music appear to be more attractive to younger generations that rely heavily on iPhones, tablets and technology.
“Streaming music is another avenue for people to discover music but it won’t take the place of picking up a tangible object like a record,” McCune said.
One of the main factors noted in a financial report released by Pandora is the purchasing of licenses to play music. Securing different contracts made up 6.7 percent of its revenue at the end of 2015.
Long Live the Goat has released music on both Pandora and Spotify but said there are different distributors to choose from that have different rules and regulations.
For their latest project, the brothers went with a different music distributing service which did not require them to pay a yearly renewal fee. “We were able to put our music online for free but we got less of the proceeds for it,” Alex Fishback said.
Chicago is still home to a few large record stores but some have been forced to close, like the Logan Square based shop Saki, which officially shut its doors December 1st.
As musicians, the Fishbacks said they will always continue to make music and release albums. Brett Fishback said streaming services like Spotify and Pandora are here to stay but physical music is not going to stop.
“[Online streaming] is a double edged sword — It’s great that I can listen to any band that I want anytime for free but it’s very hard to be a musician and that be your only source of income. You can’t really do that,” he said.